Question 1

a currency swap,the effective interest rate on the money raised is known as the

Accepted Answer

A) notional principal 
B) all-in cost 
C) right of offset 
D) yield to call 
A) notional principal 
B) all-in cost 
C) right of offset 
D) yield to call

Question 2

Swaps provide a real economic benefit to the counterparties only if a barrier exists to prevent ______ from functioning fully.

Accepted Answer

A) hedging 
B) factoring 
C) arbitrage 
D) forfaiting 
A) hedging 
B) factoring 
C) arbitrage 
D) forfaiting

Question 3

The average interest rate offered by a specific group of multinational banks in London is known as the

Accepted Answer

A) LIBOR rate 
B) prime rate 
C) fed funds rate 
D) Eurobond rate 
A) LIBOR rate 
B) prime rate 
C) fed funds rate 
D) Eurobond rate

Question 4

Company X,a low-rated firm,desires a fixed-rate,long-term loan.X presently has access to floating interest rate funds at a margin of 1.25% over LIBOR.Its direct borrowing cost is 11% in the fixed-rate bond market.In contrast,company Y,which prefers a floating-rate loan,has access to fixed-rate funds in the Eurodollar bond market at 9% and floating-rate funds at LIBOR + 1/4%.Suppose they split the cost savings.
-How much would Y pay for its floating-rate funds?

Accepted Answer

A) LIBOR -.25% 
B) LIBOR -.50% 
C) LIBOR 
D) LIBOR + .5% 
A) LIBOR -.25% 
B) LIBOR -.50% 
C) LIBOR 
D) LIBOR + .5%

Question 5

exchange of debt-service obligations denominated in one currency for the service on an agreed-upon principal amount of debt denominated in another currency is known as

Accepted Answer

A) a currency swap 
B) an interest rate swap 
C) a floating-rate bond 
D) a fixed-rate bond 
A) a currency swap 
B) an interest rate swap 
C) a floating-rate bond 
D) a fixed-rate bond

a currency swap,the effective interest rate on the money raised is known as the

Swaps provide a real economic benefit to the counterparties only if a barrier exists to prevent ______ from functioning fully.

The average interest rate offered by a specific group of multinational banks in London is known as the

exchange of debt-service obligations denominated in one currency for the service on an agreed-upon principal amount of debt denominated in another currency is known as

Introduction

The Determination of Exchange Rates

The International Monetary System

Parity Conditions in International Finance and Currency Forecasting

The Balance of Payments and International Economic Linkages

Country Risk Analysis

The Foreign Exchange Market

Currency Futures and Options Markets

Measuring and Managing Translation and Transaction Exposure

Measuring and Managing Economic Exposure

International Financing and National Capital Markets

Functions of Euromarkets

The Cost of Capital for Foreign Investments

Examining International Portfolio Investing

Corporate Strategy and Foreign Direct Investment

Capital Budgeting for the Multinational Corporation

Financing Foreign Trade

Current Asset Management and Short-Term Financing

Managing the Multinational Financial System

Filters

Exam 9: Swaps and Interest Rate Derivatives

a currency swap,the effective interest rate on the money raised is known as the

Swaps provide a real economic benefit to the counterparties only if a barrier exists to prevent ______ from functioning fully.

The average interest rate offered by a specific group of multinational banks in London is known as the

exchange of debt-service obligations denominated in one currency for the service on an agreed-upon principal amount of debt denominated in another currency is known as

Introduction

The Determination of Exchange Rates

The International Monetary System

Parity Conditions in International Finance and Currency Forecasting

The Balance of Payments and International Economic Linkages

Country Risk Analysis

The Foreign Exchange Market

Currency Futures and Options Markets

Measuring and Managing Translation and Transaction Exposure

Measuring and Managing Economic Exposure

International Financing and National Capital Markets

Functions of Euromarkets

The Cost of Capital for Foreign Investments

Examining International Portfolio Investing

Corporate Strategy and Foreign Direct Investment

Capital Budgeting for the Multinational Corporation

Financing Foreign Trade

Current Asset Management and Short-Term Financing

Managing the Multinational Financial System

Filters